There might be fewer cards and letters sent to residential mailboxes these days, but that doesn’t mean the importance of the U.S. Postal Service has diminished.
“I love the post office,” said Anita Manning, a writer who lives in Brandywine Hundred. “My 5-year-old granddaughter just mailed me her first letter…. I wrote her back right away and enclosed a book of Toy Story stamps … to encourage more letter writing.”
Manning said she hopes her granddaughter, who just started kindergarten in Chevy Chase, Md., will replicate her own childhood in Rhode Island, when she regularly wrote to her grandparents in Chicago.
U.S. Postal Service Sees Less Mail in Slumping Economy
Experiences like Manning’s are becoming less common. First-class mail volume — the postal service’s bread and butter — declined nationwide from 103.7 billion pieces in 2001 to 78.2 billion pieces last year, a drop of 24.6 percent.
The deteriorating economy and the growth of the internet and social media have taken their toll on the postal service. From a peak mail volume of 213.1 billion pieces in 2006, the total fell 19.8 percent, to 171 billion last year.
Those figures are among the reasons the postal service is facing a $10 billion loss in operating revenue this year and help explain why Congress is now considering comprehensive legislation, including a bill sponsored by Delaware Sen. Tom Carper, to address a raft of budgetary issues plaguing the postal service, including wages and benefits, pension and retiree health costs, closing post offices, eliminating Saturday deliveries and developing partnerships with state and local governments.
On Sept. 6, Postmaster General Patrick Donahoe testified at a Senate hearing that the Postal Service is likely to default on its financial obligations and could face insolvency by this time next year unless lawmakers take action.
And, while the most recent list of post offices being studied for closure spared Delaware, on Thursday the Postal Service announced that the distribution center at Hares Corner, near New Castle, is one of 300 nationwide that will be considered for closure.
Organizations in the First State Continue to Depend on Postal Service
While the Postal Service’s finances and services are debated in Washington, there’s far more at stake than the job security, pensions and insurance coverage for postal workers. Here in Delaware, the direction the Postal Service takes will have an impact on publications, nonprofit organizations and businesses large and small.
“A lot of people still like to get magazines and weekly newspapers by mail,” Carper said in an interview.
Terry Plowman, editor and publisher of Delaware Beach Life magazine, said he “can’t imagine life without the post office.” The magazine publishes eight issues a year, and mails about 10,000 copies of each issue, more than half its circulation, Plowman said.
Mail subscribers “want hard copy. We can’t replace that with digital,” he said. And, he added, subscribers expect to be billed by mail, and most advertisers want their invoices and tear sheets to be mailed, even if more of them are making their payments online.
In his mailbox at home, Carper said, “we find a lot of people asking for money.”
The Food Bank of Delaware is one of those organizations that rely on the Postal Service for fundraising. Direct mail solicitations generated 10.5 percent of the nonprofit’s revenue for fiscal 2011, which ended June 30, said spokeswoman Kim Kostes. The food bank anticipates $550,000 in direct mail revenue for the current fiscal year. That’s 9 percent of the organization’s revenue, she said. The percentage drop represents a conservative forecast, more in keeping with economic conditions than an indication of reduced effectiveness of direct mail, she added.
Like many other nonprofits, the food bank does use the internet and social media, primarily Facebook and Twitter, to spread its marketing message, and now mails only two printed newsletters a year to its supporters, Kostes said. But, she pointed out that the online marketing effort is designed primarily to deliver information about programs, not to raise money.
“If anything were to happen to the Postal Service, we’d have to rework how we do a lot of our fundraising,” she said.
Additional coverage of Delaware and the U.S. Postal Service crisis:
U.S. Postal Service remains crucial resource for nonprofits
Senator Carper Q&A on the U.S. Postal Service
At the University of Delaware, David Morris, senior associate director of annual giving, would agree with that assessment.
The annual giving campaign relies heavily on bulk mailing — having sent about 494,000 pieces in the 2009-2010 academic year and almost 423,000 pieces during 2010-2011, Morris said. Mailings decreased between the two years because the university was trying to keep costs in line, and per-unit pricing for printing and mailing increased during the cycle, he said.
Even so, “direct mail is by far the lowest-cost [method] to raise a dollar,” he said.
If direct mail costs continue to increase, Morris said, “it’s possible we’ll have to look at more online campaigns.”
Some numbers support moving toward greater use of the internet and social media. For example, 53 percent of the university’s alumni base has graduated in the last 20 years, and from 2009-2010 to 2010-2011, the university experienced whopping increases in the number and value of online donations – from 2,154 gifts totaling about $441,000 to 3,523 gifts totaling about $731,000, Morris said.
Even with the increase in online giving, donations generated by direct mail exceeded the total for online contributions and the student phonathon, he said.
While the university’s use of the internet is increasing, it is still regarded as “a supplement” to other marketing tools, Morris said. “We cannot abandon direct mail as a fundraising tool,” he said.
Attractive mailings from institutions to which the recipient has a strong attachment are more likely to be opened — and draw a positive response — than direct mail pieces from businesses, he said.
For some recipients, he said, that first-rate mailing from a favored institution now gets the positive reception once reserved for the birthday and holiday cards that are now much less likely to arrive in the mail.
Private businesses are moving away from the Postal Service as they try to cut costs, Carper said, but they’re not about to abandon it altogether.
Delmarva Power, for example, initiated a “Green Bill” program two years ago, giving customers the option of receiving and paying their bills online instead of through the mail. About 33,000 customers, a little more than 10 percent of the utility’s 31,000 or so customers, have chosen this option, spokeswoman Bridget Shelton said.
Including the utility’s territory in Maryland, 8.8 percent of the 450,000 payments received monthly are processed online, and the rest arrive through the mail, Shelton said.
Delmarva continues to use the Postal Service regularly. For its current “smart meter” initiative, she said, the utility has mailed more than 500,000 letters, fact sheets and newsletters to its customers.
“While we see a lot of value for our customers in offering them paperless billing,” Shelton said, “we also recognize that there are a significant number of customers who prefer receiving and paying their bill through traditional mail. Aside from billing, direct mail has proven to be an effective means for informing our customers of changes impacting their electric or gas service. It is an essential communication channel for us and one that we will continue to use.”
Charlie Copeland, the former Republican state senator who is president of Associates International, a direct mail and printing business, assesses the situation bluntly: “No doubt about it, if there’s no post office, we would go out of business.” And, he adds, so would some of his customers, the ones that rely primarily on direct mail to generate revenue.
Regardless of what decisions are made in Washington, whether the Postal Service is propped up by government subsidies or “right-sized” to better balance its costs and expenses, “it’s going to radically alter my business and the business of my customers,” Copeland said. “No matter what we may think, the way it was is gone and it is not coming back.”
Delawareans Embrace Technology but Hope Post Offices Stay Open
The way Delawareans use the Postal Service demonstrates an increased willingness to employ the new media and a reluctance to give up the old.
“I love opening all the packages I receive, especially at Christmas,” said June Zappa of Wilmington. But many of those packages, she said, contain items she ordered online from Amazon.com and eBay.
JulieAnne S. Cross, a Wilmington public relations consultant, serves many of her clients by preparing online newsletters and social marketing programs. She found, however, that billing her clients by email “was an across-the-board failure.”
“I don’t think I could get along without it [the Postal Service],” she said, “but I could get along with less of it, though. Daily home delivery could go down to three days a week and I’d be fine.”
Magazine publisher Plowman wants the Postal Service to survive, not just for his business but for society as a whole.
“It’s an irreplaceable service, and I don’t see anyone else stepping up to the plate at an affordable rate,” he said. “Who else would take a letter from Delaware to Alaska or Hawaii for 44 cents? … No Saturday delivery, that’s no big deal. Fifty cents a letter for postage, that’s still cheap.”